The Crippling Economy of Pakistan
The Crippling Economy of Pakistan Today I noticed a beautiful change in the Financial statements of State Bank of Pakistan. Till now they used to reflect the forex reserve status in USD Bn but today it is reflected in USD Mn. The Crippling economy badly needs a bailout from IMF. Though the current forex reserve in books is $9.4Bn with SBP, the effective net forex is only $1.5bn. Let me explain that- out of $9.4Bn, 1.5Bn is the loan from China which is given purely to enhance the forex value but with a condition that it cannot be spent, $2.6bn is the value of Country's Gold reserved (whatever little they have) and $2.8Bn is the value of Sukkuk and Eurobonds which Pak govt issued (we have not catered for the currency devaluation in this, it will be 15-20% higher if we take that into the consideration) and another $1Bn of govt sureties which cannot be redeemed immediately. taking in account all these factors, the net reserves with SBP stands at an alarming figure of $1.5Bn only...